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Sat September 25 2021

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Commonwealth Games organisers battle cost inflation

11 Mar 20 The organisers of the 2022 Birmingham Commonwealth Games have had to redraw their plans after finding that the cost of building the Athletes Village had risen by £91.8m.

Birmingham City Council image of the Commonwealth Games Village
Birmingham City Council image of the Commonwealth Games Village

The Commonwealth Games Village site on the former Birmingham City University campus in Perry Barr has to accommodate around 6,500 athletes and officials coming to the city in the summer of 2022.

But a report to Birmingham City Council this week revealed that work it heading £91.8m over budget. It said: “Pressures have emerged as a result of the overheated local market, through construction cost price inflation, the demand for construction workers in the Perry Barr area and a fixed delivery date”.

A total of £778m of public funding has been allocated to staging the games by central and local government.

Under the original plan, 1,400 new homes were to be built in the Athletes’ Village as the first phase of a long-term Perry Barr regeneration scheme with 5,000 new homes.

The revised plan is to develop only 10 of the 11 plots earmarked for athletes’ accommodation, squeezing more beds into a little less space. This will reduce construction costs and enable the organisers to recoup £25m from selling the un developed site later on

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“Plot 11 is to be de-scoped for reasons of poor value for money,” the report says. This reduces the housing construction costs from £314m to £300m.

Contracts are also in place for the construction of 72% of the 6,500 bed spaces required.

Lendlease Construction was last year appointed under a construction development agreement (CDA) to manage the delivery of the Phase 1 residential scheme - the Athlete's Village.

Design maturity of the scheme has increased to give a greater level of confidence through a more detailed understanding of the complexity, pricing and construction timescales, the council says.

Negotiations have progressed well with tier one contractors for the construction of the Phase 1 residential developments. Contracts have been signed for four plots and work started on site.

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